Tips to boost your Rental Yields
We often get enquiries from our landlords about what they can do to increase their rental returns. This article provides some useful tips for our landlords that once implemented should increase their rental returns!
In our experience, tenants are willing to pay more for a property if they are provided with a few extra ‘bonuses’. Even small things can make a big boost to rental yields for investors. Our clients who are proactive with their investment properties are usually enjoying higher returns that their counterparts.
Installing solar panels are a great way to boost rental yields. We have a few landlords who have done this.
Patrick Bright, director of EPS states “For around $4,000 plus installation fees, you can have a 5kw solar panel system installed on your investment property that should generate enough power to look after the tenants’ needs with a little leftover to put back into the grid.”
This idea is not only environmentally friendly but it also ends up in our clients being able to charge approximately $20/week extra in rent as savings are being passed on to the tenant in their not having to pay power bills.
“Many of these solar panel systems come with a 20-year or more warranty, so given you would have your money back inside five years from the installation date, it’s a wise medium-term investment.” Solar is the perfect way to help both the environment and your back pocket.
RENTING WITH A FURNITURE PACKAGE.
We have a number of furnished apartments on our books.
Generally these apartments return very well for our landlords. Of course not all tenants are looking for a place with furniture however the ones who are, are certainly willing to pay for it.
Our tenants who rent our furnished properties usually fall into the following categories; people who are relocating with work contracts, people new to the Gold Coast either from inter-state or overseas, those who have recently moved out of the family home, divorcees. These people are all willing to pay more for the sake of an easy move.
Properties can be styled affordably to substantially increase the asking rental.
Another thing to consider with this option is where the rental property is located. We find that properties which are centrally located and are within an ‘inner city’ radius tend to suit furniture packages. It is important to remember that there must be strong tenant interest in the area before deciding to spend money on a furniture package.
Another benefit of furnishing an investment property is the tax element. We have written about the benefits of depreciation in a previous blog.
If you are going to consider furnishing a rental property, we would consider the following ‘essential elements’ to include: Refrigerator, television, washing machine, dining table, beds. Also we would suggest using a contemporary and fairly neutral style that will appeal to a large cross section of prospective tenants.
Whether or not a property has air conditioning can be a make or break for tenants. The presence of a heating or cooling system is far more important to a tenant than expensive and attractive light fittings.
When considering installation of an air-conditioning system it is prudent to choose one which offers a heating function also.
With the majority of our rental properties located on the sunny Gold Coast and in Brisbane, we find that properties available to rent with air-conditioning achieve higher rental amounts – especially in summer!
CONSIDER INCLUDING SOME ‘EXTRAS’
It is human nature to like to receive that little bit ‘extra’. It makes people feel good. Small additions to your rental property like a dishwasher are beneficial to all parties – you get to increase the rent and the tenants are happy.
According to www.dishwasherguru.com the simple act of adding a dishwasher can earn you an extra $260 in rent a year – almost half the cost of a mid-range machine. It’s an even better return when you consider that the average life of a dishwasher is between nine and 12 years,
THE SECOND BATHROOM!
The need for a second bathroom is often vital to our tenants; especially if it is a share house situation.
A few of our landlords have converted the internal laundry into a second bathroom or ensuite. Although this exercise is not always free of hassles and can be costly, it does return significantly.
Again, it is good to get financial advice when considering works such as these. Often these types of works will certainly result in a positively geared property via both increased rental returns and increased property value.
Often landlords can expect to receive a weekly increase in achievable rent of $100 which can work achieve a 100% return on the renovation and also benefit from increased capital growth.
So…. Where does the laundry end up? Landlords can either move the washing machine into the main bathroom or kitchen or create a brand new laundry.
ADD AN EXTRA BEDROOM
If you have a large rental property with a spare formal dining area that does not have a lot of traffic, converting it into an extra room is an easy and effective way to increased rental yields and add to the value of the property.
Often converting a formal dining area to another bedroom is simply a matter of adding a wall, door and ceiling fan.
Again on the sunny Gold Coast and in Brisbane we spend as much time outdoors as possible. The existence or otherwise of an outdoor entertaining area is another make or break factor for many tenants when looking for property to rent.
There are many options to consider here eg tilling an existing courtyard or extended a verandah or patio. A cost effective solution is to install shadecloths. Families with young children are often looking for an undercover space where their children can play.
We’ve all heard it before but storage in a property of any kind is very important. Tenants find built in wardrobes particularly appealing when looking for properties to rent.
Other ideas to boost storage solutions in your rental property are building in under stairs if you have them or erecting a shed in the backyard.
SECURITY SCREENS ON DOORS & WINDOWS
Another request we get time and time again from tenants is whether or not the landlord would consider installing security screens on doors & windows. We find this is very important to tenants especially for families where either one or both of the parents often have to go away for work.